E&S Prices Increased Average 2.7% In Past Year, Says AutoQuotes

Blended list prices for the more than 350,000 models from more than 400 foodservice equipment, supplies and furnishings manufacturers rose 2.7% for the year ending June 30, according to the latest data from AutoQuotes Inc. AQ Managing Director David Greene presented the data at FER‘s E&S Market Forecast President’s Preview meeting in Evanston, Ill., on July 27.

The 2.7% average increase is “modest” historically, Greene said, adding that manufacturers remain “cautious and selective” about increases in what they see as a still fragile market. But increases in materials prices of as much as 40% in the past year for stainless and other steels, aluminum, copper and plastics, are pushing suppliers to recover some of the run-up. (See related story this issue.)

This has led to a split approach during the past year, Greene said. Manufacturers raised prices an average 5.2% on the top half of products, but left them flat for most of the other half. The median price increase was only 0.3%. Prices were reduced for nearly 5% of the models.

During 2009 and ’10, manufacturers raised prices an average of only 1.3%, but during the four years from 2005 through ’09, a period which saw repeated surges in materials prices, list-price increases averaged nearly 6%.

Greene also noted that manufacturers are increasing the frequency of increases. Comparing the number of increases posted in July, for the period ’09 to ’11, the number has jumped from 14 increases in ’09 to 24 last year to 34 this year. In the second quarter this year (April-June), manufacturers posted 98 total increases, compared with 63 last year and only 23 in ’09.

Greene concluded that, given continuing upwards pressure on materials prices and the constraint many manufacturers have felt in the still soft E&S market, buyers can expect continuing moderate increases during the coming year.

Additional data on the frequency and timing of increases as well as changes for individual product categories can be found at http://blog.aqnet.com/?p=645.  “””

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